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Lead Letter: Solutions for Jacksonville's pension crisis

This controversy over pensions raises the fundamental question of the employer’s role in planning and funding an individual’s retirement.

The problem of unfunded employee pensions disappeared in the private sector decades ago as employers, ironically under pressure from the federal government, shed the unlimited risk of guaranteed retirement benefits.

Today, most private sector employers offer a 401(k) plan where employees can contribute a portion of their salary, pre-tax, and the employer can match the employee’s contribution.

Most 401(k) plans offer a variety of mutual funds in which the employees may invest their contributions.

There are no cost-of-living adjustments, no guarantees, no pensions. The employee is solely responsible for accumulating a pot of money to live on after retirement.

The taxpayer is not beholden to union-negotiated backroom deals or the inept actions of government bureaucrats.

Some government employees argue that they settled for “lower pay” to get these no-risk pensions. John Q. Taxpayer, however, is stuck with the bill.

Providing “no-risk financial guarantees” to civil servants and shifting the unlimited risk to the taxpayer is precisely why government is a broken institution.

Duval County should take a page from the annals of American history and implement a sustainable, long-term solution.

First, limit the current pension plan to existing enrollees.

Second, offer to all future non-union employees a 401(k) plan, implement a 15 percent across-the-board salary increase and a 6 percent 401(k) match for new employees.

Like those in the private sector who fund government in the first place, new employees probably won’t retire early.

However, they will develop a much better understanding of capitalism, profits, losses, risks and returns, and the real economy upon which their retirement depends.